Acquisition of Glen Grant. Conference call Milan, 23 December 2005

Transcription

1 Acquisition of Glen Grant Conference call Milan, 23 December 2005

2 Deal terms > Campari announces the signing of an agreement for the purchase of the whisky brands Glen Grant, Old Smuggler and Braemar from Pernod Ricard > Moreover, as part of the deal, Campari is acquiring the Glen Grant distillery, located in Rothes, Scotland, and the stock relative to the existing business > The transaction follows certain undertakings by Pernod Ricard to divest certain brands and assets further to its acquisition of Allied Domecq > The total price paid for the acquisition is 130 million, including 115 million for Glen Grant (9.2 x the brand direct contribution in 2004) and 15 million for Old Smuggler and Braemar (2.5 x the brand direct contribution in 2004) > The acquisition, which is subject to the authorisation by the EU commission, will be paid in cash SLIDE 1

3 Malt Scotch whisky Market overview > The emergence of new markets and mature markets still showing growth suggest that there are opportunities for single malt Scotch to further expand > Single malt is highly attractive spirits category also in light of the recent M&A activity World spirits market by category Malt whisky market evolution (in million 9L-cases) CAGR : +4.7% Source - IWSR Aniseed 4% Gin / Genever 6% Cachaca 7% Liqueurs 11% Rum 12% Bitters / Spirit Aperitifs 3% Tequila 2% Brandy 14% Whisky 21% Vodka 20% SLIDE 2

4 Glen Grant Brand overview > A genuine single malt dating from 1840, with a volume of approximately 350,000 9-liter cases > #2 selling single malt whisky in the world > #1 best selling Scotch whisky in Italy > #2 best selling single malt in Germany > Potential growth opportunities in untapped markets, most notably in Latin America, Asia and US World-wide malt Scotch whisky market Top 8 brands Top 8 players market shares of whisky market in Italy ('000 9L-cases) 2004 Market shares Dec 04/ Jan 05 Glenfiddich 653 Glen Grant 13.2% Glen Grant 381 Ballantine's Finest (PR) 10.6% The Glenlivet 369 Johnnie Walker Red (Diageo) 8.6% The Macallan 298 Jack Daniels (Brown Forman) 8.8% Cardhu 278 J&B (Diageo) 7.0% Glenmorangie 252 Chivas (PR) 5.9% UD Classic malts 178 The Glenlivet (PR) 0.6% Aberlour 161 William Lawson (Bacardi) 3.7% Total Top 8 2,570 Source - IWSR Source - Nielsen SLIDE 3

5 Glen Grant Brand overview (cont d) > Glen Grant started enjoying a great success in Italy 15 years ago > Clear colour, pure taste provides Glen Grant with a clearly different proposition > Broad consumer profile and strong among young consumer between 24 and 44 years old > Very high brand awareness in relevant markets (93% in Italy) > Italy is the core market > Growth potential in untapped markets SLIDE 4

6 Glen Grant Production facility > The whisky is produced at the Glen Grant Distillery, located in Rothes, Scotland > Annual capacity of 5.9m litres of alcohol and dunnage cask store with a capacity of 12,000 barrels > The Glen Grant distillery is ranked # 4 in terms of capacity among malt distilleries in Scotland List of top malt distilleries Capacity - '000 litres of alcohol Glenfiddich (William Grant) 10,000 Tomatin (Tomatin) 7,000 Macallan (Edrington) 6,000 Glan Grant (Campari) 5,900 The Glenlivet (Pernod Ricard) 5,900 Balvenie (William Grant) 5,600 Glenrothes (Edrington) 5,600 Miltonduff (Pernod Ricard) 5,240 Kinivie (William Grant) 4,400 Ardmore (Pernod Ricard) 4,200 Dufftown (Diageo) 4,000 Tamdhu (Edrington) 4,000 Glenmorangie (LVMH) 4,000 Source: The Scotch Whisky Industry Review 2004 SLIDE 5

7 Old Smuggler and Braemar - Brand overview Old Smuggler > A blended Scotch whisky brand created in 1835, sold in a unique and distinctive bottle at an attractive price > A leading player in the US Scotch market > # 2 best selling whisky in Argentina > Strong growth and leading positions in Eastern Europe (Czech Republic, Hungary) Braemar > Positioned as an authentic blended Scotch at an attractive consumer price > It is predominantly an entry-level Scotch for consumer new to the category in emerging markets > Braemar has enjoyed considerable success in recent years in a number of Eastern European markets and in Thailand SLIDE 6

8 Key financials Sales > Based on data and representations received from the seller, sales in 2004 for the three brands totalled some 40 million (pre IAS / IFRS) Stock > The stock associated with the brands (included in the consideration paid) totals approximately 26 million Capex > Estimated capex of 0.3 million per annum Fixed assets > Approximately 6.5 million SLIDE 7

9 Acquisition rationale and conclusions > Further strengthening in the spirits segment > Entrance into the Scotch whisky category of strategic importance in some key geographic areas > Glen Grant has great potential in untapped markets (Latin America, Asia and US) > Among the top four largest distilleries in Scotland > Acquired business has a good fit with existing Campari organisation SLIDE 8

10 For additional information: Investor Relations - Gruppo Campari Phone: ; Fax: investor.relations@campari.com; Website: